● The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders
By Kate Kelly
Summary via publisher, Penguin
Nestled deep in the towers of banking and finance are the commodities traders who spend their days gambling with oil, gold, and corn contracts. They’re highly educated world travelers with a penchant for risk, and they’re here to bet big on the future of the raw materials that make our economies hum. They’re wealthy, barely regulated, and can be a force for tremendous good – or ill. Now Kate Kelly, the bestselling author of Street Fighters, shines light not just on the commodities market, but also on some of its key figures. Her characters include Pierre Andurand, a hedge-fund manager who generated the winningest annual performance ever for an oil trader in 2008, and Ivan Glasenberg, whose secretive Swiss commodities giant, Glencore, has been thrown into the spotlight. Kelly paints a dramatic narrative of immense power in the hands of a few, and the so-far hapless efforts by the Obama Administration to rein in the cowboys.
Continue reading →

The US economic trend revived after a spring swoon, according to a markets-based profile of macro conditions. The Macro-Markets Risk Index (MMRI) closed at 10.6% on Thursday, June 12.  The comfortably positive reading suggests that business cycle risk remains low. A decline below 0% in MMRI would indicate that recession risk is elevated. By comparison, readings above 0% imply that the economy will expand in the near-term future.
Continue reading →

Retail sales in May rose at a lesser rate than the crowd expected, but the year-over-year trend continues to advance at a 4%-plus pace, the Census Bureau reports. Spending ex-gasoline sales doesn’t alter the generally upbeat profile. The last two monthly changes, however, show a substantial deceleration in growth. Is this a sign of trouble for the all-important consumer-spending outlook? Maybe, but if it is we’ll see a more persuasive signal in the annual pace of retail sales in the months ahead. For now, it looks like nothing much has changed in terms of the trend.
Continue reading →

Iraq oil shock could kill world economic recovery, experts warn
The Telegraph | June 11
As violence threatens Iraq’s oil industry, experts fear crude at $130 per barrel would damage the global economy.
Open warfare between the government and rebels in Iraq would pose a threat to the global economic recovery should oil production from the war-torn Middle East state suffer a serious disruption, analysts have warned….
“The worst case scenario is that we see production from Iraq slip down to levels in the last Gulf war, then oil could spike $20 a barrel very quickly,” Ole Hansen, vice-president and head of commodity strategy at Saxo Bank told The Telegraph.
“In that scenario, the entire economic recovery, which is still fragile, could stall and we could even slip back into recession in some regions.”
Continue reading →

US retail sales are expected to rise 0.2% in tomorrow’s May report vs. the previous month, according to The Capital Spectator’s median econometric forecast. The prediction represents a slightly faster rate of growth over the previously reported 0.1% gain for April.
Continue reading →

This is what perfection looks like: high trailing returns and low volatility. US equities (S&P 500) are up more than 18% on an annualized total-return basis over the past five years—roughly double the long-run gain. This happy state of affairs, as usual, is accompanied by a growing number of forecasts that we’ve passed over into a new norm. But we’ve been there and done that, many times, only to find out that visions of grandeur were built on sand. Reality is a series of regime shifts, where risk and return are still stochastic processes. That’s a problem–a big problem, but only if your expectations are set in stone and your portfolio mix is rigid and inflexible.
Continue reading →

Projections for risk premia in the long run edged down in the wake of May’s strong gains for most of the major asset classes. The Global Market Index (GMI)– an unmanaged, market-value weighted mix of all the major asset classes—is expected to generate an annualized 3.9% risk premium (total return less the “risk-free” rate), based on analysis of data through May 2014. The prediction is down from 4.1% in last month’s update.
Continue reading →

Would you know a bear market if you saw one? Hindsight suggests this is an easy task. The telltale signs are obvious… after the fact. From prices dropping below moving averages to negative rolling returns to an assortment of other technical signals there’s a long list of empirical facts that equate with bear markets. The problem is recognizing, as early as possible with a high level of confidence that the market’s transitioned from a bull market to its dark counterpart and vice versa.
Continue reading →

● Global Macro Trading: Profiting in a New World Economy
By Greg Gliner
Summary via publisher, Wiley
Global Macro Trading is an indispensable guide for traders and investors who want to trade Global Macro – it provides Trading Strategies and overviews of the four asset classes in Global Macro which include equities, currencies, fixed income and commodities. Greg Gliner, who has worked for some of the largest global macro hedge funds, shares ways in which an array of global macro participants seek to capitalize on this strategy, while also serving as a useful reference tool.
Continue reading →

Payrolls in the private sector increased 216,000 on a seasonally adjusted basis in May, which is in line with expectations. Although the gain was sharply below April’s revised increase of 270,000, today’s report marks the fourth straight month of 200,000-plus monthly advances. As a result, the current four-month average advance (+222,000) is the highest in more than a year.
Continue reading →